ITC a good defensive bet: Dilip Bhat

ITC a good defensive bet says Dilip Bhat, Joint MD, Prabhudas Lilladher.

Bhat told CNBC-TV18, “ITC- for the 13th consecutive quarter has posted a 20 percent plus profit after tax (PAT) growth and within the components if you see the cigarettes still continues to dominate with return on capital (RoC) of around more than 200 percent, but what is interesting is even the paper division probably is contributing very well and the disappointment has been on the hotel front maybe because their new property has come up in Chennai, but overall I think ITC – though a lot of people will still talk about it being expensive, which surely is a very expensive defensive stock to buy. I would still be eager to put my money behind ITC because this kind of growth has been very steady and looks sustainable.”
He further added, “Hero MotoCorp- drop in the profit was a bit too disappointing for all of us, though it was not really out of the whack because I think the competition is really singeing them at the moment. So all said and done I think Hero MotoCorp possibly could still face some downward pressure. But not to forget both Hero MotoCorp and Bajaj Auto continues to generate good amount of free cash – the return on equity (RoEs) still continue to be pretty good. So both the stocks probably would look a lot more defensive at a slight correction of the prices.”